Part of the Monero community is furious with its own leader at the moment. Several speculators saw the value of their holdings jump and then sink yesterday — after a promised major “announcement” turned out to be a prank.
The Monero Enterprise Alliance
Project leader Riccardo Spagni, better known online as “Fluffypony”, promised Monero would make a “MAJOR” announcement on 25th May. Up to the date, he tweeted out a series of teasers.
— Riccardo Spagni (@fluffypony) May 23, 2017
Some were suspicious or assumed Spagni was joking. Others, however, were caught up in the excitement that Monero’s big moment was about to arrive.
Such was the “hype” that Monero’s token XMR reached a peak of $58.51 USD on 24th May.
However the big announcement, when it came, was this — a 1:46 minute parody of every inspirational corporate video, promising the “Monero Enterprise Alliance”. Over mawkish orchestral music, titles appeared with oddball lines like “where sitting in an enchanted forest can inspire an SEO expert to create a beautiful sports car” and “where business can thrive on a handshake, or be destroyed by ransomware”.
The moment you've been waiting for!
Here is tonight's massive, game-changing, earth-shattering Monero announcement:https://t.co/0mhH7aMfzy
— Riccardo Spagni (@fluffypony) May 24, 2017
The video concluded with the statement “Anyone who believed this was real and got excited should stick to scams. I have a large list of some I can recommend.” Many laughed. Some called it a “Rick Roll” — the internet practice of enticing users to click to a link with promising news, only to greet them with a Rick Astley song.
— COIN ARTIST (@coin_artist) May 24, 2017
Fluffy, We Are Not Amused
But the world of cryptocurrency speculation is serious business. The XMR price, which had leapt in expectation, sank back to $42.65. It has since rebounded, though only slightly.
Speculators, especially those who bought XMR on the runup, vented their anger on Spagni. Public forums like Twitter and Reddit lit up with messages disapproving of his actions, of varying degrees of anger.
Just sold all my XMR holdings and dont care if it does go up ever again. I cant trust the project so thank you @fluffyponyza 🤬
— Marco Polo (@Cryptograph_IT) May 24, 2017
On Reddit’s /r/Monero forum, at least six of the top ten threads were critical, with comments like “fake news Fluffy”, “Pump and dump”, “unethical” and “not OK”. Some commenters suggested Spagni was not joking, but had deliberately manipulated the XMR markets.
Was it appropriate to pull a market-moving prank on a token with a market cap in the hundreds of millions? Is the project leader’s responsibility to maintain a stable price, or stamp out wild speculation to maintain integrity?
Speaking to Bitsonline, Spagni assured the community he did not profit from the price movements and took measures to ensure he could prove he hadn’t. He said he’d welcome an investigation, to prove he’s not “like the guys on Twitter pumping altcoins”.
Spagni did have some defenders, but the most strident voices were those saying the prank was unethical and reckless. It may have long-termed damaged Monero’s reputation, they continued.
— Chris Ellis (@MrChrisEllis) May 24, 2017
There were also some initial reports of death threats, though Spagni said:
“I joked about receiving a death threat on Twitter because someone’s threat was vague, but turns out he was just threatening to beat me up.”
Interview: So Why Did He Do It?
Let’s go back a week, to the beginning of the Consensus conference in New York City.
Spagni told Bitsonline that Consensus was a “trigger point” for him. While he enjoyed attending, the influx of banks and financial institutions made him feel the community is being co-opted, “especially when so much praise was lathered on to largely irrelevant individuals instead of the developers and very early ecosystem builders who made Bitcoin what it is today.”
“I felt like I needed to do something that would shake it up, and highlight the dangerous path that we’re on with the ICO exuberance etc. Do we want to be in an industry that is indistinguishable from pyramid schemes and multilevel marketing scams? Do we want the entire space to be associated with the likes of Amway and Network21? I hope not.”
He added that there’s an influx of newcomers to the space who have no idea how open-source development works, which is frustrating. More recently, though, many have attempted to pin responsibility for those newcomers onto him.
“The problem with that is that I’m firstly not responsible for much in Monero, really, and I definitely don’t want to be held responsible for what people do with Monero.”
Of the ethics of toying with that multi-million dollar market cap, Spagni said:
“The ethics of it are certainly borderline, I’m not naive enough to believe otherwise. There are people who I’ve upset unintentionally, and I am truly sorry that they feel that way. But I had to do something that would have a drastic, real-world effect, otherwise nobody would pay attention. I’ve been repeating this message and warning people about the dangers for so long, and it seems like nearly nobody listens. Doing anything less would simply not have had a measurable impact.”
The More Rational Reason for Monero’s Prank
However there’s more to Monero’s “announcement” than just an attempt at humor. There’s a very rational reason to discourage wild speculation on an experimental project.
Spagni has long said Monero is not a suitable vehicle for speculative investors. “I have only ever told people NOT to buy Monero,” he wrote in a tweet.
A lawsuit would find that I made no money, and have only ever told people NOT to buy Monero.
— Riccardo Spagni (@fluffypony) May 25, 2017
If a coin’s value suddenly rises exponentially, there’s a danger that coin’s infrastructure will come under attack, and hackers will target users. For an altcoin with a small user/miner base, that could be disastrous.
Spagni described such a large cap as a “bug bounty” for any hacker who could exploit the code — a bounty that also destroys the project. He pointed to The DAO as a classic example of this happening in reality. Therefore, a responsible leader would have an incentive to prevent market cap from getting out of hand.
Spagni wrote later in a statement that it is not Monero’s culture to pre-announce big news, since “that is unethical”.
“I know that you’re used to cryptocurrencies being run either like a company or by a company, but I am convinced now, more than ever, that doing so is a grave mistake. Monero is a permissionless open-source project. Anyone can work on it, regardless of their skill.”
It’s an important lesson for those interested in cryptocurrency to learn. However this lesson did come at the financial expense of many who’d put actual money into the project, however misguided they were.
The current XMR value shows there’s still plenty of faith left in the Monero project, though. Users just need to fully understand its nature and not expect orthodox behavior.
What do you think of Fluffypony’s troll? Do you hold XMR? Let us know in the comments.
Images via Monero Enterprise Alliance